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Gala2k [10]
3 years ago
10

If, at the end of a period, a company using perpetual inventory erroneously excluded some goods from its ending inventory and al

so erroneously did not record the purchase of these goods in its accounting records, these errors would cause
Business
1 answer:
3241004551 [841]3 years ago
7 0

Answer:

no effect on net income, working capital, and retained earnings.

Explanation:

Perpetual inventory method is an accounting method of tracking stock that uses real time changes in inventory to estimate remaining stock of goods.

Tools like the POS (point of sale) and scanners are used to register sales and give accurate estimate of inventory in real time.

In the given scenario if some goods were not included in ending inventory and also their purchase was not recorded it will have no effect on net income, working capital, and retained earnings.

Because the cost of purchasing it was not recorded, so in the books there is no effect

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Shandra Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 131,000 pounds, with del
Free_Kalibri [48]

Answer:

Shandra Corporation

The amount which Shandra Corporation will report as foreign exchange gain in net income for the quarter ended June 30 is:

$5,240

Explanation:

Price of goods = 131,000 pounds

Delivery and payment date = April 20

On February 20, the spot rate for call option on 131,000 pounds = $1.37

Cost of the option = $1,310

The spot rate on April 20 = $1.42

The foreign exchange gain or loss to be reported in net income for the quarter ended June 30 = $0.05 ($1.42 - $1.37

Total gain = ($0.05 * 131,000) - $1,310

= $6,550 - $1,310

= $5,240

b) With this call option, which gives Shandra the right to buy the underlying asset, Shandra hedges his contract to purchase goods from a foreign supplier, and therefore, profits when the spot rate increases from $1.37 on February 20 to $1.42 on April 20.  The profit made is reduced by the cost of the call option.

8 0
3 years ago
The auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop.The standard l
Fed [463]

Answer:

Actual Quantity= 151.57

Actual Rate= $3.17

Explanation:

Giving the following information:

Standard Hours 2.50

Standard Rate $35.00

Standard Cost $87.50

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<u>First, we need to calculate the actual number of hours. We need to use the direct labor efficiency variance:</u>

<u></u>

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

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35Actual Quantity = 5,305

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<u>Now, the actual hourly rate. We need to use the direct labor rate variance formula:</u>

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

50 = (3.5 - Actual Rate)*151.57

50= 530.5 - 151.57Actual Rate

151.57Actual Rate= 480.5

Actual Rate= $3.17

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Yeah the game company would lower the price of the game.
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When there few close substitutes available for a​ good, demand tends to be
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